Tax Clinic
Disagreeing with Underpayment Tax Assessment, Taxpayers May File Objections

Wednesday, 31 August 2022

Disagreeing with Underpayment Tax Assessment, Taxpayers May File Objections

Receiving a letter of determination from the tax assessment letter does make you nervous, especially if it says underpayment.

If that is what you are going through, don't panic and stay calm. The first thing you have to do is read carefully the contents and details in it. Make sure that the decree is in accordance with the actual situation.

If you feel that the contents of the assessment letter do not match the actual conditions, you as a taxpayer still have the opportunity to refute it. One thing that you can do is file an objection letter to the tax office.

In other words, an objection letter is one of the media for resolving disputes between taxpayers and the tax office over differences of opinion or disputes arising from the issuance of tax assessment letters.

In fact, objections are not only filed when the taxpayer receives a tax assessment letter that is deemed inappropriate. The following things can be used as the basis for filing an objection:

  1. Underpaid Tax Assessment Letter (SKPKB)
  2. Additional Underpayment Tax Assessment Letter (SKPKBT)
  3. Overpayment Tax Assessment Letter (SKPLB)
  4. Zero Tax Assessment Letter (SKPN),
  5. Deductions or collections by third parties that are deemed erroneous.

In the context of an objection based on a tax assessment letter, a taxpayer can file it only if it concerns the material or content of the tax assessment letter.

Such as the amount of loss, and the amount of tax as well. Other than that, the objection will not be considered by the tax office.

Conditions for Submission of Objections

Referring to the Minister of Finance Regulation (PMK) Number 9/PMK.03/2013 which has been amended by PMK Number 203/PMK.03/2015, the following requirements must be met by taxpayers when submitting an objection letter to the tax office:

First, the objection letter must be written in Indonesian and sent to the Tax Office (KPP) where the taxpayer is registered either in person, by post, or by other means such as an expedition service or electronically using an e-filing application.

Second, state the amount of tax payable, the amount of tax withheld or collected, or the amount of loss according to the taxpayer's version, along with the reasons and basis for calculating it.

Third, an objection letter can only be submitted for one tax assessment letter, one tax withholding, or one tax collection.

Fourth, the application for objection can only be made if the taxpayer pays the tax that has yet to be paid which is still approved during the final discussion of the audit results.

Fifth, an objection letter can only be submitted within a period of three months from the issuance of the tax assessment letter or the withholding or collection of taxes.

Except in case of an emergency or force majeure such as a natural disaster, the time limit cannot be complied with.

Sixth, the objection letter must be signed by the taxpayer. Even if the taxpayer cannot sign it, it can be authorized to another party accompanied by a power of attorney.

Objection Submission Process

Prior to filing an objection, a taxpayer may request a written statement from the DGT through the Tax Office where the taxpayer is registered, regarding matters that are the basis for tax imposition, loss calculation, withholding, or collection of taxes.

However, it needs to be remembered that the request for information is not mandatory, because it is a right that can only be used by taxpayers if they feel it is not clear the reason for the decision.

Furthermore, in the process of resolving the objection, the DGT is authorized to borrow books, records, data, and information that are the basis for the dispute in the objection.

The request for these documents must be fulfilled by the taxpayer a maximum of 15 working days after the request letter is sent. If not, a second request letter will be sent back and must be fulfilled a maximum of 10 working days after the second letter is sent.

In addition, the DGT is also authorized to request information regarding disputed material from taxpayers and third parties who have a relationship with the disputed material. In fact, the tax authority is also authorized to review the place of the taxpayer or other places needed in dispute resolution.

In the objection process, the DGT may also summon taxpayers to discuss and clarify the necessary matters.

In processing the objection request, the DGT must issue the decision a maximum of 12 months or one year from the date the objection letter is received from the taxpayer.

If the time limit has passed, and the DGT has not issued a decision, the objection submitted by the taxpayer is considered approved and a decision letter of objection must be issued a maximum of 1 month from the end of the deadline.

Revocation of Objection

Taxpayers can withdraw their objection requests before the date of receipt of the notification letter to attend (SPUH) by the taxpayer.

Revocation can be done by submitting an application to the tax office, in writing in the Indonesian language signed by the taxpayer or other person who is authorized.

On the request for revocation, the DGT is obliged to provide a reply on whether to approve or reject the revocation.

Because the taxpayers withdraw their objection application, they will be deemed not to have filed an objection and the tax that has yet to be paid in the SKPKB or SKPKBT becomes tax debt since the tax assessment letter is issued.

Subject to Administrative Sanctions

An objection request can indeed be a way out when the taxpayer is not satisfied with the tax office's decision. However, taxpayers must also ensure that their dissatisfaction is supported by valid data and reasons.

This is because filing an objection without proper preparation and data may result in administrative sanctions.

Because, if the objection application is rejected, the taxpayer will be subject to administrative sanctions in the form of a fine of 50% of the total tax in the objection decision minus the tax paid before filing the objection.

The sanctions also apply to objection decisions which actually increase the amount of tax debt that must be paid.


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